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> Use this file to discover available pages before exploring further.
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# Automatic Tax Calculation

Apotheo uses Stripe Tax to automatically calculate and collect the correct sales tax, VAT, or GST on client payments. Tax amounts are determined based on your location, your client's location, and the type of service being sold.

This is enabled by default — when a client checks out, Stripe calculates the appropriate tax and adds it to the payment.

## Setting Up Stripe Tax

Before tax can be calculated, you need to configure a few things in your Stripe Dashboard:

### 1. Set Your Head Office Address

Go to [Stripe Tax settings](https://dashboard.stripe.com/settings/tax) and enter your business address. This is used as the origin for tax calculations.

### 2. Add Your Tax Registrations

In the same Tax settings page, add the regions where you're registered to collect tax. For example, if you're based in Texas, add your Texas sales tax registration. If you sell to clients in the EU, add your VAT registration.

You only need to register in regions where you have a tax obligation. Stripe provides guidance on where you may need to register based on your transaction history.

### 3. Set Tax Behavior on Your Products

When creating pricing options in Stripe, choose how tax is applied:

- **Exclusive** — tax is added on top of the price (e.g. $100 + $8 tax = $108)
- **Inclusive** — tax is included in the price (e.g. $100 including tax)

## What Clients See

During checkout, the Stripe payment page shows a tax line item with the calculated amount based on the client's location. Clients are asked for their address, which Stripe uses to determine the correct rate.

## How It Works in Apotheo

When a client checks out through Apotheo, the checkout session is created with automatic tax enabled. Stripe handles the rest:

1. Determines the client's location from their billing address
2. Looks up the applicable tax rate based on your registrations and the product type
3. Calculates the tax and displays it during checkout
4. Collects the tax as part of the payment

If Stripe Tax isn't configured in your dashboard (e.g. you haven't added your address or tax registrations), the checkout will still work — it simply won't include tax calculations.

## Tax Reporting

Stripe provides tax reports in your Dashboard under **Tax > Reporting**. These show the tax collected by region, which you can use for filing your tax returns.